§2169-B. Use of consumer reports in insurance underwriting

1.Definitions.
As used in this section, unless the context otherwise indicates, the following terms
have the following meanings.

A. "Adverse action" means a denial or cancellation of, an increase in any charge for
or a reduction or other adverse or unfavorable change in the terms of coverage or
amount of any insurance, existing or applied for, in connection with the underwriting
of personal insurance. [2003, c. 223, §1 (NEW).]

B. "Applicant" means an individual who has applied to be covered by a personal insurance
policy with an insurer. [2003, c. 223, §1 (NEW).]

C. "Consumer" means an individual insured whose credit information is used or whose
insurance score is calculated in the underwriting or rating of a personal insurance
policy or an applicant for a personal insurance policy. [2003, c. 223, §1 (NEW).]

D. "Consumer report" has the same meaning as in 15 United States Code, Section 1681a(d). [2013, c. 588, Pt. C, §7 (AMD).]

F. "Credit information" means any credit-related information derived from a consumer
report, found on a consumer report itself or provided on an application for personal
insurance. "Credit information" does not include information that is not credit-related
regardless of whether it is contained in a credit report or application or used to
calculate an insurance score. [2003, c. 223, §1 (NEW).]

G. "Insurance score" means a number or rating that is derived from an algorithm, computer
application, model or other process that is based in whole or in part on credit information
for the purposes of predicting the future loss exposure of an individual applicant
or insured. [2003, c. 223, §1 (NEW).]

2.Use of consumer reports.
Notwithstanding this subsection, an insurer may use a consumer report as permitted
under the Fair Credit Reporting Act pursuant to Title 10, chapter 209-B and 15 United States Code, Chapter 41. An insurer may use information obtained from
a consumer reporting agency to calculate an insurance score for underwriting and rating
purposes, except that an insurer may not:

A. Use an insurance score that is calculated using income, gender, address, zip code,
ethnic group, religion, marital status or nationality of a consumer as a factor; [2003, c. 223, §1 (NEW).]

B. Deny, cancel or refuse to renew a policy of personal insurance solely on the basis
of credit information without consideration of any other applicable underwriting factor
independent of credit information and not expressly prohibited by paragraph A; [2003, c. 223, §1 (NEW).]

D. Take an adverse action against a consumer solely because that consumer does not have
a credit card account, without consideration of any other applicable factor independent
of credit information; [2003, c. 223, §1 (NEW).]

E. Consider an absence of credit information, the number of inquiries or an inability
to calculate an insurance score in underwriting or rating personal insurance unless
the insurer has demonstrated to the superintendent that an absence of credit information,
the number of inquiries or an inability to calculate an insurance score is a relevant
factor to the risk underwritten or rated by the insurer and the insurer applies this
factor in a manner approved by the superintendent; or [2003, c. 223, §1 (NEW).]

F. Take an adverse action against a consumer based on credit information unless an insurer
obtains and uses a credit report issued or an insurance score calculated within 90
days before the date the policy is first written or renewal is issued. [2003, c. 223, §1 (NEW).]

[
2013, c. 588, Pt. C, §8 (AMD)
.]

3.Notice of use of credit information.
If credit information is used by an insurer, an insurer shall disclose, either on
the insurance application or at the time the insurance application is taken, that
credit information may be obtained by the insurer in connection with the application.
The disclosure must be written or provided to an applicant in the same medium as the
application for insurance. The insurer is not required to provide the disclosure
statement required under this subsection to any insured on a renewal policy if such
consumer has previously been provided a disclosure statement. An insurer may demonstrate
compliance with this subsection by using the following example disclosure statement:
"In connection with this application for insurance, we may review your credit report
or obtain or use a credit-based insurance score based on the information contained
in that credit report. We may use a 3rd party in connection with the development
of your insurance score."

[
2003, c. 223, §1 (NEW)
.]

4.Notice of adverse action.
If an insurer makes an adverse action based on credit information, the insurer shall
provide the consumer with notice as required by this subsection. The insurer shall
provide:

A. Notice to the consumer that an adverse action has been taken in accordance with the
requirements of the Fair Credit Reporting Act pursuant to Title 10, chapter 209-B and 15 United States Code, Chapter 41; and [2013, c. 588, Pt. C, §9 (AMD).]

B. Notice to the consumer explaining the reason for the adverse action. The reason
or reasons must be provided in sufficiently clear and specific language so that an
individual can identify the basis for the insurer's decision to take an adverse action.
The notice must include a description of up to 4 factors that were the primary influences
of the adverse action. The use of a generalized term such as "poor credit history,"
"poor credit rating" or "poor insurance score" does not meet the explanation requirements
of this paragraph. Standardized credit explanations provided by consumer reporting
agencies or other 3rd-party vendors are deemed to comply with this paragraph. [2003, c. 223, §1 (NEW).]

[
2013, c. 588, Pt. C, §9 (AMD)
.]

5.Dispute resolution and error correction.
If it is determined through the dispute resolution process set forth in 15 United States Code, Section 1681i(a)(5) that the credit information of a current
insured was incorrect or incomplete and if the insurer receives notice of such determination
from either the consumer reporting agency or from the insured, the insurer shall reunderwrite
and rerate the consumer within 30 days of receiving the notice. After reunderwriting
or rerating the insured, the insurer shall make any adjustments necessary, consistent
with its underwriting and rating guidelines. If an insurer determines that the insured
has overpaid premium, the insurer shall refund to the insured the amount of overpayment
calculated back to the shorter of either the last 12 months of coverage or the actual
policy period.

[
2013, c. 588, Pt. C, §10 (AMD)
.]

5-A.Rescoring.
An insurer that uses insurance scores to underwrite or rate risks, upon request
of the insured but no more often than once every 12 months, shall obtain an updated
credit report and recalculate the insurance score and shall reunderwrite and rerate
the consumer within 30 days of receiving the request. After reunderwriting or rerating
the insured, the insurer shall make any adjustments necessary, consistent with its
underwriting and rating guidelines, on the anniversary date or the effective date
of the renewal of the policy.

[
2007, c. 74, §1 (NEW)
.]

6.Filing of insurance scoring models.
An insurer that uses insurance scores to underwrite and rate risks shall file the
scoring model or other scoring processes used by the insurer with the superintendent.
A 3rd party may file scoring models on behalf of insurers. A filing that includes
insurance scoring must include loss experience justifying the use of credit information
if required by the superintendent. The insurance scoring model contained in a filing
required under this subsection is confidential and not a public record within the
meaning of Title 1, section 402, subsection 3.

[
2003, c. 223, §1 (NEW)
.]

7.Indemnification.
An insurer shall indemnify, defend and hold agents harmless from and against all
liability, fees and costs arising out of or relating to the actions, errors or omissions
of a producer who obtains or uses credit information or insurance scores for an insurer,
provided the producer, in the exercise of reasonable care, follows the instructions
of or procedures established by the insurer and complies with any applicable law or
regulation. This subsection may not be construed to provide a consumer or other insured
with a cause of action that does not otherwise exist in the absence of this subsection.
This subsection may not be construed to indemnify a producer for the producer's omission
when a producer elects not to obtain a credit-related insurance score in connection
with an application for personal insurance coverage from an insurer that the producer
represents if that insurer uses credit information as permitted under this section
to underwrite that coverage.

[
2003, c. 223, §1 (NEW)
.]

8.Applicability.
This section applies only to personal insurance. This section does not apply to
commercial insurance.